Duff and Phelps had hoped the club would be able to proceed with a Company Voluntary Arrangement, a process HMRC had previously indicated would be acceptable, but at the crucial point, the plan was vetoed by the taxman.
A statement put out from the administrators, Duff and Phelps, confirmed that a CVA had been the preferred way forward, a plan which HMRC had previously agreed to consider. However, because the club had previously failed to comply with its tax liabilities, HMRC has told Duff and Phelps that it will not agree to the plan.
Rangers is being purchased by a consortium led by Charles Green and the administrators were keen to make it clear that it is not this transaction which HMRC have taken umbrage to. HMRC have told Duff and Phelps that it is unhappy with the money which will be available to creditors, if a CVA were allowed to proceed, especially taking into account the amount which Rangers owe HMRC.
Duff and Phelps said that they have been told that HMRC believe the interests of the public will be ‘better served’ by forcing the club to be liquidated and rebuilt from scratch. This will allow those responsible for the debts to be held accountable, with the potential to secure further funds.
The deal with the consortium will still go ahead, with around £5.5 million being paid to distribute amongst creditors. However, Rangers will now be under a three year embargo from playing in Europe and will have to persuade the other clubs to allow it to continue playing in the SPL, under a new corporate identity.
Whilst admitting the news was a blow, Duff and Phelps said the future for Rangers at Ibrox has been secured and the club will survive.